EU Court rejects Mediaset’s appeal on DTT box incentives
July 28, 2011
From Branislav Pekic in Rome
The European Court of Justice has dismissed the appeal brought by broadcaster Mediaset and confirmed that the Italian contributions for the purchase of digital terrestrial decoders, granted in 2004 and 2005 and totalling €220 million, constitute state aid incompatible with the common market.
After the 2004 budget, which had introduced the incentive, rival broadcasters Europe 7 and Sky Italia had presented complaints to the Commission which in 2007 ruled that contributions constituted State aid for digital terrestrial broadcasters.
Now the EU court points out that “the contributions in question have prompted consumers to buy digital terrestrial decoders, limiting the costs for digital terrestrial TV broadcasters, enabling them to consolidate their market position in respect to new competitors.”
The Court also confirmed that ”the Court has correctly stated that aid whose immediate beneficiaries are consumers may nevertheless be an indirect subsidy to economic players, such as the broadcasters in question. Rightly, the Court also rejected Mediaset’s argument that the Commission has not proven the existence of a link between the contribution and the broadcasters in question.”
Finally, the Court “also agrees with the reasoning of the Court according to which the element of selectivity based on technological characteristics, which promotes digital terrestrial technology to the detriment of satellite, led to a distortion of competition, which is why the measure in question is incompatible with the common market.”